The UK home retail market shrank by £9.02 billion during the recession, according to new figures released today.
Retail analysts Conlumino conducted research on behalf of Webloyalty and found that, between 2008 and 2011, furniture sales declined by 25 per cent while sales of electrical fell 16 per cent.
Decreased demand within the housing market has been a primary factor in the shrinkage, as more than 700,000 consumers who have sought to move house and been unable to within a one or two-year timeframe, have put off spending in the interim.
As such, the homewares sector has suffered a prolonged drop in sales, though Conlumino noted that “a slight increase” in purchase figures is expected in the next three years.
Soft furnishings sales are forecast to increase three per cent by 2015 as consumers unable to move will eventually work to refresh their current home.
Of those who have been unsuccessful in finding a new home, 72 per cent will defer spending, though less than a third will manage to do so for two years.
However, Conlumino’s Managing Director Neil Saunders warned that the spending increase would be fairly minimal and highlighted the importance of understanding the wider mood to stimulate buying.
“With over 60 per cent of consumers classifying themselves as ‘nesters’ who view the home as a place of sanctuary, the phrase ‘home is where the heart is’ holds true,” he said.
“This has to be good news for home retailers as it means that even in constrained times there is a large audience which is receptive to spending on their homes.”
In order to aid retailers’ understanding of spending habits, the research has outlined pre-recession and post-recession behaviour, noting that nearly 70 per cent of shoppers would decorate a whole room at once prior to the financial crisis of 2008.
Post-2008, less than 40 per cent would commit to decorating a single room at once, indicating a rise in “piecemeal pricing” which allows consumers to buy key items to redecorate a room.
Meanwhile, after two years of being unable to move house, over two thirds of consumers have then chosen to decorate at least one room, nearly double the amount of consumers who chose to decorate after less than a year of putting their house on the market.
Guy Chiswick, Managing Director of Webloyalty UK, believes that retailers have the opportunity to rejuvenate the home retail market.
He said: “The recession has had a huge impact on consumer behaviour and the nature of shopping for the home has changed.
“Retailers need to meet the challenge that the declining economy, coupled with the rise of multi-channel, has posed.
“They need to offer the best value, quality and service, and for home retailers particularly, they need to entice consumers to spend by making their showrooms leading-edge and inspirational.”